CALGARY — Whitecap Resources Inc. says it has struck an all-stock deal to buy private oil and gas producer NAL Resources Ltd. for the equivalent of about $155 million.
The Calgary-based company says it will issue 58.3 million shares to buy its crosstown rival from owner Manulife Financial Corp.
Whitecap says NAL's assets overlap with many of its own operations and offer opportunities for cost-saving synergies in west central Alberta, west central Saskatchewan and southeast Saskatchewan.
Manulife is expected to own about 12.5 per cent of the combined entity if the deal closes in early January as expected. It has agreed to hold its shares for at least 12 months, with one-third of the stock released then and the rest over the next six months.
NAL is currently producing about 27,000 barrels of oil equivalent per day, about 55 per cent oil and natural gas liquids, but that is forecast to decline to 22,000 boe/d in 2021.
Whitecap says its stand-alone base case production forecast for 2021 is 60,000 boe/d on capital investment of between $200 million and $250 million.
This report by The Canadian Press was first published Aug. 31, 2020.
Companies in this story: (TSX:WCP, TSX:MFC)
The Canadian Press
